US STOCKS-Wall St rises as M&A chatter picks up; Fed meeting eyed

June 16 (Reuters) - U.S. stocks were up on Tuesday, after
two straight sessions of losses, as deal activity picked up in
the consumer and healthcare sectors and investors waited for the
outcome of a two-day Federal Reserve meeting.

The central bank is unlikely to raise rates in this meeting
but investors will watch for any hints from Fed Chair Janet
Yellen at a press conference after the meeting on Wednesday
about the timing of a possible rate increase - the first in
about a decade.

The Fed has said it remains data-dependent and will raise
rates only when it sees an improvement in the economy.
Second-quarter data points to a recovery after a halt in growth
earlier in the year.

U.S. housing starts fell in May after a sharp increase the
previous month, but a surge in permits for future construction
to a near eight-year high suggested the pullback was temporary
and pointed to underlying strength in housing.

"We continue to see some meaningful activity where M&A is
concerned," said Eric Wiegand, senior portfolio manager at U.S.
Bank Wealth Management.

"A September hike has been priced in by the market but
investors are more keen on seeing the pace of the hike."

World markets were down with European shares hitting a near
four-month low as financial markets braced for the possibility
of Greece defaulting on its debt.

Widely believed to be running out of money, Greece is one
step closer to default and a possible exit from the euro zone
after the latest talks collapsed on Sunday.

Athens has to repay $1.8 billion in loans to the
International Monetary Fund at the end of June.

At 11:26 a.m. ET (1526 GMT) the Dow Jones industrial average
was up 85.07 points, or 0.48 percent, at 17,876.24, the
S&P 500 was up 6.33 points, or 0.3 percent, at 2,090.76
and the Nasdaq Composite was up 14.14 points, or 0.28
percent, at 5,044.12.

Nine of the 10 major S&P 500 sectors were higher, with the
consumer staples index leading the advancers with a
0.82 percent increase.

UnitedHealth Group's 1.5 percent rise boosted the Dow
and the S&P on a report that the company was considering buying
Cigna and Aetna. Aetna was up 2.7 percent while
Cigna fell 1.23 percent.

Coty's shares jumped 19.4 percent to $31.10 after
the perfume maker won auctions to acquire hair-care, fragrance
and cosmetics businesses from P&G for as much as $12 bln,
according to sources. P&G was up 1.1 percent at $78.98.

Advancing issues outnumbered decliners on the NYSE by 1,612
to 1,281. On the Nasdaq, 1,521 issues rose and 1,103 fell.
(Reporting by Tanya Agrawal; Editing by Don Sebastian)